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What are GAM and TAM in MLS, how are they used?

These are two financial mechanisms clubs in MLS can use.

MLS: Orlando City SC at Columbus Crew SC Trevor Ruszkowski-USA TODAY Sports

If you are a Major League Soccer fans, chances are you have heard the terms GAM, TAM, xAM, DP, U22, International Roster Spot, Homegrown, Generation Adidas, and Superdraft. The MLS roster rules are complicated. Today we focus on GAM and TAM, or Genearl Allocation Money and Targeted Allocation Money.

The salary budget maximum for the 2022 MLS season is $4.9 million, the same amount as 2021. Only the 20 players on the senior roster count against this salary budget. Players on the supplemental roster do not count against the salary budget, this is mostly Homegrown players. Clubs do not have to fill senior roster slots 19 and 20, a minimum salary charge ($81,375) will be assessed for all unused senior roster spots besides 19 and 20.

Last season the Columbus Crew spent around $14.3 million on the team’s roster, well above the maximum salary budget for a team. By using GAM or TAM, an MLS clubs can lower its salary charges for its players

A Designated Player (DP) takes up the maximum salary budget charge of $612,500. Taking this into account, the U22 discount for Alex Matan, and an estimated $1 million for the supplemental roster, the Crew spent around $9.836 million for its senior roster. This is double the maximum salary budget for the team. The Black & Gold needed nearly $5 million in GAM and TAM to be within roster compliance last season. Clubs were awarded a combined $4.325,000 in base allocation money (xAM) in 2021.

MLS has increased xAM over the last couple of years, which allowed teams to invest more in their squads. MLS is a different league since drastically increasing both GAM and TAM to teams. While these can be confusing on how they are acquired and used, the league has benefited in increased flexibility for senior roster spots.

Let’s look closer at what GAM and TAM are and how each can be used in MLS.

GAM

Teams were awarded $1,625,000 in GAM for 2022, plus additional GAM for those that missed the MLS Cup playoffs, lost players to the expansion draft, expansion club dilution, qualifying for the CONCACAF Champions League, selling a player outside of the MLS and for having only two DPs (teams with three DPs are charged $150,000 each year and this money is then split as GAM between the teams with two or few DPs).

GAM is tradable. The Athletic’s Sam Stejskal reported in 2017 that GAM expired after three transfer windows, however, this is not made clear by the MLS. Teams can convert part of a player's transfer fee for sales outside of the MLS into GAM up to $1,050,000 in 2022. While certain numbers are not made available, the Crew should be awarded $2 million or more in 2022.

GAM can be used to reduce players' salary charges, although GAM cannot be used to reduce a player’s salary budget charge to less than 50 percent, while 100 perrcent of loan and transfer fees can be paid by GAM. GAM is also usable to sign players to new contracts.

TAM

Like GAM, a certain amount of TAM is awarded to teams by MLS each year. In 2022, that number is $2,800,000. There are currently no other ways to earn additional TAM. This number will go down in future years and the amount of GAM each year will increase. TAM is not tradeable and expires in four transfer windows.

TAM is useable in similar ways to GAM. One interesting use is to convert a DP to a non-DP. If this is done with TAM, a new DP must be signed simultaneously. This can only be done with non-max DPs. DPs earning more than $1,612,500 are considered max DPs and cannot be converted to a non-DP status. Darlington Nagbe and Lucas Zelarayan are max DPs for the Black & Gold.

Clubs can also use TAM to pay acquisition fees of players like the Crew did for Yaw Yeboah this offseason. TAM can also be used to fund Homegrown players' first MLS contract.

MLS roster rules are beyond confusing for the more casual viewer — and even some of the hardcore fans. Massive Report hopes this helped understand some of the financial mechanisms in the league that Columbus can use.